Financing the Growth of SMEs in Africa: What are the Constraints to SME Financing within ECOWAS?

Abstract

This study attempts to provide some understanding about SMEs’ access to finance within the West African sub-region with particular interest inestablishing whether there are similarities and/or differences in the determinants of SMEs access to finance across countries in SSA. For robustnesssake, we developed both subjective and objective measures of access to finance. Using data from World Bank’s Enterprise Survey data set, weexamine the determinants of access to finance both at the sub-regional level and at the country-level. We found that, generally, at the sub-regionallevel, access to finance is strongly determined by factors such as firm size, ownership, strength of legal rights, and depth of credit information,firm’s export orientation and the experience of the top manager. However, we found important differences in the correlates of firms’ access tofinance at the country level. The findings of this study therefore have important implications for policy